Financial Planning Guide 2025

Chapter 4

Q2. How to plan for child marriage and education?

Mr. Anup John is 33 years old and has a 2-year-old daughter. He wishes to create a marriage corpus that should be ready for his daughter within 22 years. Currently, Mr. John imagines that He would spend Rs. 15 lakhs on her marriage if it were happening today.
How much does he need to save every month or every year for his daughter’s wedding, assuming a 10% inflation rate on wedding expenses?

Daughter’s age	2
Years to marriage	22
Cost of Marriage Today	Rs.15,00,000
Cost at the time of Marriage	Rs.1,22,10,412
Monthly Investment required	Rs.12,810
Or Yearly Investment required	Rs.171,008

In 22 years, a marriage costing Rs. 15 lakhs today will cost Rs. 1.22 crore. This may seem like a considerable amount, but luckily, Mr. John has a very long time horizon to build this corpus, i.e., 22 years!

An investment of approximately Rs. 13,000 (invested monthly) or Rs. 1.71 lakhs (invested annually) will provide Mr. John with the corpus he requires, assuming a 10% inflation rate on marriage expenses.

Similarly, Mr. John’s friend, Mr. Jack, has a 5-year-old son.

Mr. Jack’s son is graduating after 12 years. Mr. Jack wants his son to pursue engineering, for which he currently requires Rs. 5 lakhs. After completing his engineering, Mr. Jack also wants him to go abroad for post-graduation, which currently costs Rs. 25 lakhs.

How much is Mr. Jack going to need to send his son to engineering college in 12 years?

Son’s Age	5
Years to Graduation course	12
Amount required	Rs.500,000
Cost at the time of graduation	Rs.15,69,214

Monthly Investment required for graduation	Rs.5,677
Yearly Investment required for graduation	Rs.73,382

Years to post-graduation course	16
Amount required today for post-graduation course	Rs.25,00,000
Cost at time of post-graduation	Rs.1,14,87,432
Monthly Investment	Rs.24,415
Yearly Investment	Rs.319,542

An investment of approximately Rs. 5,700 (every month) or Rs. 73,500 (every year) will help Mr. Jack achieve his son’s graduation corpus. An investment of Rs. 25,000 (every month) or Rs. 3.20 lakhs every year will help Mr. Jack achieve his son’s post-graduation corpus.

When investing for both goals, Mr. Jack must keep in mind that he needs to invest in the right investment products that match his risk profile. When planning for any goal, it is essential to invest based on your risk tolerance and time horizon for achieving that goal. It is necessary to understand the risks associated with equity investing.

When a goal is drawing nearer, the goal corpus can be de-risked to protect it from equity volatility and invested into debt to provide fixed returns and capital safety.

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